Dangote, NNPC, Other Marketers May Crash Petrol Prices Again As Crude Oil Prices Fall
- Nigerians are optimistic that the falling crude oil prices in the international market will result in a further price crash
- They expect the Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPC) to reduce prices again
- Crude oil prices fell in the international market, with Brent selling for $71.62 a barrel and Bonny Light selling for $73.53 a barrel
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Petrol prices may drop further from the current N860 per litre sold by Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPC).
This also came amid the strengthening of the Nigerian currency in the foreign exchange market.
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Oil prices fall to a 12-week low
Oil prices dropped about two per cent to a 12-week low following reports that OPEC+ will proceed with the planned oil output increase in April.
Brent crude declined $1.19 per barrel or 1.6%, to settle at $71.62 a barrel, while the West Texas Intermediate (WTI) crude dropped $1.39, or two per cent, to sell at $68.37.
According to reports, the current prices were the lowest sales for Brent since December 6, 2024, and WTI since December 9, 2024.
Oil producers move to increase production
Reuters reported that the OPEC and allies such as Russia, decided to proceed with a planned April increase in oil output.
Other producers such as Nigeria have disclosed that crude oil prices and the exchange rate are key factors in the cost of refined petroleum products.
Recently, Dangote Refinery crashed its ex-depot prices to N825 per litre from N890.
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Also, the NNPC responded with a similar price adjustment, sparking a price war among the two biggest players in the downstream petroleum sector.
Nigerians hope for further fuel price crash
Nigerians have expressed mixed reactions regarding the falling prices of crude oil, a major forex and revenue earner for Nigeria.
According to them, the fall is a mixed fortune for the government and Nigerians.
While the fall in oil prices could translate to lower petroleum product prices, it signifies a major drawback for the Nigerian government which benchmarked crude oil prices at $75 per barrel for the 2025 budget.
Legit.ng reported that Bonny Light, Nigeria’s benchmark for the 2025 budget, sold at about $73.53 a barrel on Tuesday, March 4, 2025.
Analysts believe that while the fall in oil prices is a blessing in disguise for petroleum products consumers in Nigeria, it is a major concern for the country, which hinged the 2025 budget on oil prices.
Falling oil prices are a mixed fortune
Adeola Yusuf, an energy policy analyst, described the fall in crude prices as a double-edged sword.
He said that while it is a good omen for the people, it is a dilemma for the government, which had hoped to reap a bumper harvest from the rising oil prices.
He said:
“It is both a blessing and a curse. A blessing because Nigerians will now buy fuel at affordable prices as dealers and refiners crash prices in line with international oil prices.
A curse because it may result in a massive budget deficit for the Nigerian government, which pegged oil prices at $75 a barrel. Right now Brent, Bonny Light and Western Intermediate blends are selling below $75.”
In his comment to Legit.ng, Wale Ogundeji, an energy analyst, highlighted some of the impacts that crude oil prices have on Nigeria's economy.
He said:
"The decline in crude oil prices significantly impacts Nigeria’s economy, given its heavy reliance on oil revenues. Lower prices lead to reduced government earnings, exacerbating budget deficits and limiting funding for critical sectors like infrastructure, healthcare, and education.
"The naira weakens due to declining foreign exchange inflows, fueling inflation and increasing the cost of imports. States dependent on federal allocations struggle to meet salary and project obligations, deepening economic hardship."
Ogundeji added that to mitigate these effects, Nigeria must diversify its economy, boost non-oil revenue, and implement structural reforms to enhance productivity and resilience in sectors like agriculture, manufacturing, and technology.
Punch reports that the national president of the Petroleum Product Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, said the price of petrol would continue to fall based on FX rates and international crude oil prices.
He disclosed that lower crude oil prices would mean affordable fuel for Nigerians.
Dangote Refinery buys Algeria’s Saharan crude oil
Legit.ng previously reported that the Dangote Refinery bought its first consignment of Algeria’s light sweet Saharan blend crude.
The giant refinery reportedly bought one million barrels of cargo from Glencore, the trading firm, this week, with the consignment due to arrive in March.
Reports say the deal was not immediately confirmed by either party and the purchase price remains unknown.
Article updated with additional comments by head of business desk Victor Enengedi
Proofreading by James Ojo, copy editor at Legit.ng.
